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Tuesday, 06 September 11
INDONESIAS PROPOSED COAL EXPORT BAN MAY HAVE IMPACT ON THE INDIAN POWER SECTOR - DIPESH DIPU
.jpg) COALspot.com - This is a special interview about Indonesian proposed coal export ban by 2014, with Mr. Dipesh Dipu, Director of Deloitte Touche Tohmatsu, India.
The Indonesian government is currently in the process of drafting a new regulation that could ban the export of low-grade coal by January 12, 2014. This is likely to apply to coal below 5700 kcal/kg on air dried basis in value.
As of now Indonesia is producing around 150 million tons of coal with calorific value below 5700 GAD (according to chairman of Indonesian coal mining association). However by 2014, there are possibilities the total production of below 5700 GAD coal may reach more than 200 million per annum.
Will Indonesian coal export ban impact on the Indian fuel requirements?
The earlier grade of coal that was being considered for proposed ban has GCV of 5100 kcal/kg of less (adb), which can be comparable to 3800-4200 kcal/kg (arb) domestic coal available in India. This grade of coal has found favor in India primarily due to likely price advantage but economics of power generation based on such grade of imported coal may be a suspect. This considering that such grades of coal from Indonesia typically have high moisture content, which makes transportation cost per unit of energy generated higher. The quantum of the low grade of coal (<5100 kcal/kg adb) procured from Indonesia is likely to remain relatively low.
However, if the new definition of low grade coal is applied (<5700 kcal/kg adb), it may be reasonable to believe that such a ban may have impact on the Indian power sector as volumes in this grade of coal are expected to rise in the proportion of coal exports to India. Several of the acquisitions made by Indian power generation companies in Indonesia have been in coal blocks that will produce coal of this grade, and a blanket ban on the exports can jeopardize power plant development in India.
On the other hand, the domestic Indonesian market may not be prepared to consume all the coal mined of this grade in view of the power generation capacity addition plans in Indonesia. In such a case, the coal mine development is likely to be deferred. The Indonesian law makers may need to reconsider domestic market demand, investment climate in coal sector and impact of the legislation on the export revenues.
What is the alternative source for Indian power industry if the proposed coal export ban come into effect by 2014?
Indian power generation companies have been forced to look out for coal assets abroad due to the investment and regulatory environment within the country. India boasts of more than 110 billion tonnes of coal reserves, which largely fall within a 300 meters of depth. If the regulatory and investment environment is amended to allow greater participation of private sector Indian dependence on imports will be reduced.
However, for imports, India will continue to look at Indonesia, South Africa, Australia and newer destinations like Mozambique and Columbia. But these sources also have constraints, domestic demands in South Africa is likely to restrict quantum jump in exports out of South Africa. Indonesia has also proposed domestic market obligations. Mozambique may have infrastructure constraints for large volumes of coal being transported from Tete province to ports of Maputo, Ncala or Beira. Australian coal is of high quality but may have higher costs of mining and transport.
What would be the additional cost if Indian consumers switch their sourcing origin from Indonesia?
Indonesia has competitive advantage due to its geographical closeness. However, on a per tonne basis, assuming comparable quality, costs of transport may make marginal difference when compared with South Africa and Mozambique.
When compared to Australian coal, due to the high quality, cost of energy may well be comparable even though shipping costs are higher. Between Indonesian coal (5500 kcal/kg adb priced at USD 90 per tonne) and Australian coal (6500 kcal/kg adb priced at USD 120 per tonne), indicative variable cost difference of power generation may be about Indian Rupees 0.20 to 0.30 per kWh (electricity unit) in favor of Indonesian coal.
Will it affect Indian economy growth or this coal export ban is ignorable as India can easily identify alternative sources of fuel?
The magnitude of growth in power generation in India will necessarily mean that coal will remain the mainstay. Natural gas has had issues of availability. Nuclear plant development is facing socio-political challenge in view of the risks of technology failure. Development of hydel power has also faced issues of land acquisition, rehabilitation & resettlement apart from the technical issues of hydro-geological features. Renewable sources such as solar and wind generation are still projected to constitute a small portion of India power generation mix. Identifying an alternative source that can match coal in its accessibility, availability and affordability in the context of scale of capacity addition required in India is a challenge.
What is the Indian government's role on this issue, whether government has to come out with the solution such as easing Indian mining and environment law, open up mining for foreigners, G2G arrangement, etc…?
There is a need to look at domestic sources with pro-active and constructive approach and make all necessary legal and statutory amendments that make the resources available and mineable. Easing the regulations may not be one of such measures but making those regulations work in sync with each other in a time bound and predictable manner must certainly be.
There is certainly a case for opening the domestic coal sector for private participation, including independent miners, and for foreign participation so that newer technology and enhanced scale of operations are implemented in India. The regulation also needs to permit risk capital to come in for prospecting and exploration.
For imports the G2G relations can be leveraged to secure coal assets. India has good relationship with Indonesia and has also signed a tax treaty with Mozambique in 2010 which will facilitate investments. Government may also engage with these countries to ease exports to India and extend fiscal support to coal mining companies investing in mining and associated infrastructure development.
About Dipesh Dipu
Dipesh Dipu works as Director with Deloitte Touche Tohmatsu India Pvt. Ltd in the Energy and Resources consulting practice of the firm and anchors the Firm’s initiative in the mining and metals sectors.
He is a mining engineering graduate from Indian School of Mines and is a Chartered Financial Analyst (CFA). He has also done executive program in business management from Indian Institute of Management Calcutta. Dipesh has recently been awarded the Abheraj Baldota Gold Medal for the Young Mining Engineer of the Year 2007 by the Mining Engineers’ Association of India in recognition of his contributions in the improvement of mining industry in India.
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Tuesday, 31 March 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.43 PCT - XINHUA
China Taiyuan coal transaction price index stood at 132.17 points Monday, down 0.43 percent week on week.
The index, released by Chi ...
Tuesday, 31 March 20
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CORONAVIRUS - IMPLICATIONS FOR SHIPS AND CREW - GARD
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LAY-UP AND RE-ACTIVATION REVISITED - GARD
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PANAMAX: INDONESIA LACKED VOLUME, PARTLY DUE TO FORCE MAJEURE IN INDIAN PORTS - BALTIC BRIEFING
Capesize
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- PetroVietnam Power Coal Import and Supply Company
- Australian Commodity Traders Exchange
- Intertek Mineral Services - Indonesia
- Essar Steel Hazira Ltd - India
- Toyota Tsusho Corporation, Japan
- Manunggal Multi Energi - Indonesia
- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Indogreen Group - Indonesia
- Straits Asia Resources Limited - Singapore
- Bangladesh Power Developement Board
- Leighton Contractors Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Xindia Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- MS Steel International - UAE
- Bhatia International Limited - India
- ASAPP Information Group - India
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- European Bulk Services B.V. - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Kideco Jaya Agung - Indonesia
- Ceylon Electricity Board - Sri Lanka
- GVK Power & Infra Limited - India
- Antam Resourcindo - Indonesia
- White Energy Company Limited
- Holcim Trading Pte Ltd - Singapore
- Kalimantan Lumbung Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Videocon Industries ltd - India
- Renaissance Capital - South Africa
- Agrawal Coal Company - India
- Bhushan Steel Limited - India
- Independent Power Producers Association of India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Singapore Mercantile Exchange
- Latin American Coal - Colombia
- Kartika Selabumi Mining - Indonesia
- Ministry of Mines - Canada
- Jaiprakash Power Ventures ltd
- Goldman Sachs - Singapore
- Trasteel International SA, Italy
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Star Paper Mills Limited - India
- Mercator Lines Limited - India
- Heidelberg Cement - Germany
- Chamber of Mines of South Africa
- Baramulti Group, Indonesia
- Commonwealth Bank - Australia
- Madhucon Powers Ltd - India
- San Jose City I Power Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Indonesian Coal Mining Association
- Ministry of Transport, Egypt
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Georgia Ports Authority, United States
- Asmin Koalindo Tuhup - Indonesia
- Dalmia Cement Bharat India
- CIMB Investment Bank - Malaysia
- Bahari Cakrawala Sebuku - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parry Sugars Refinery, India
- Bukit Asam (Persero) Tbk - Indonesia
- Mjunction Services Limited - India
- Sree Jayajothi Cements Limited - India
- Romanian Commodities Exchange
- Ministry of Finance - Indonesia
- Interocean Group of Companies - India
- PowerSource Philippines DevCo
- Coal and Oil Company - UAE
- Indian Energy Exchange, India
- Kapuas Tunggal Persada - Indonesia
- Gujarat Sidhee Cement - India
- SMG Consultants - Indonesia
- Sindya Power Generating Company Private Ltd
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- Directorate Of Revenue Intelligence - India
- Vedanta Resources Plc - India
- Directorate General of MIneral and Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Carbofer General Trading SA - India
- Pendopo Energi Batubara - Indonesia
- New Zealand Coal & Carbon
- Electricity Authority, New Zealand
- Larsen & Toubro Limited - India
- Port Waratah Coal Services - Australia
- Energy Link Ltd, New Zealand
- Posco Energy - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sarangani Energy Corporation, Philippines
- Edison Trading Spa - Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- LBH Netherlands Bv - Netherlands
- Petron Corporation, Philippines
- Indika Energy - Indonesia
- Makarim & Taira - Indonesia
- India Bulls Power Limited - India
- Orica Australia Pty. Ltd.
- Krishnapatnam Port Company Ltd. - India
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- Orica Mining Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Anglo American - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Electricity Generating Authority of Thailand
- Tata Chemicals Ltd - India
- Bharathi Cement Corporation - India
- Kepco SPC Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Power Finance Corporation Ltd., India
- Banpu Public Company Limited - Thailand
- The University of Queensland
- Wood Mackenzie - Singapore
- Siam City Cement - Thailand
- Parliament of New Zealand
- ICICI Bank Limited - India
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- Minerals Council of Australia
- Billiton Holdings Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Price Waterhouse Coopers - Russia
- Attock Cement Pakistan Limited
- Bulk Trading Sa - Switzerland
- McConnell Dowell - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Planning Commission, India
- Karbindo Abesyapradhi - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Marubeni Corporation - India
- Globalindo Alam Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Metalloyd Limited - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PTC India Limited - India
- Rio Tinto Coal - Australia
- SN Aboitiz Power Inc, Philippines
- Grasim Industreis Ltd - India
- Timah Investasi Mineral - Indoneisa
- Global Coal Blending Company Limited - Australia
- VISA Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Economic Council, Georgia
- Central Electricity Authority - India
- Savvy Resources Ltd - HongKong
- Standard Chartered Bank - UAE
- Thiess Contractors Indonesia
- Thai Mozambique Logistica
- Ambuja Cements Ltd - India
- Wilmar Investment Holdings
- Indian Oil Corporation Limited
- Africa Commodities Group - South Africa
- Kumho Petrochemical, South Korea
- Gujarat Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Sojitz Corporation - Japan
- Aboitiz Power Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Deloitte Consulting - India
- Malabar Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Coastal Gujarat Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Energy Development Corp, Philippines
- Vizag Seaport Private Limited - India
- Sakthi Sugars Limited - India
- Meralco Power Generation, Philippines
- SMC Global Power, Philippines
- Central Java Power - Indonesia
- Borneo Indobara - Indonesia
- Meenaskhi Energy Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- PNOC Exploration Corporation - Philippines
- Semirara Mining Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Energy - Thailand
- Medco Energi Mining Internasional
- Maheswari Brothers Coal Limited - India
- Therma Luzon, Inc, Philippines
- Lanco Infratech Ltd - India
- CNBM International Corporation - China
- Bhoruka Overseas - Indonesia
- London Commodity Brokers - England
- AsiaOL BioFuels Corp., Philippines
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- IEA Clean Coal Centre - UK
- TeaM Sual Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Sical Logistics Limited - India
- Karaikal Port Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- GAC Shipping (India) Pvt Ltd
- OPG Power Generation Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Eastern Coal Council - USA
- Merrill Lynch Commodities Europe
- Mintek Dendrill Indonesia
- Salva Resources Pvt Ltd - India
- Altura Mining Limited, Indonesia
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